The present invention relates to a computerized system of double-entry financial accounting and, in particular, to a method of entering data from financial transactions into a computer program that posts the entered information according to the known accounting theory of debit and credit. In accounting the term "posting" means transferring the debits and credits from the journal to the general ledger.
In prior art computerized financial accounting methods, the accuracy of posting of financial data into an accounting program depended on the degree of the operator's accounting knowledge. For example, when posting a financial transaction into known accounting programs, the operator had to memorize that debiting an account increases assets or expenses and decreases liabilities, whereas crediting an account decreases assets or expenses and increases liabilities or income. Evidently, when dealing with a larger number of different accounts, the entries are error-prone and, especially for a non-accountant, the errors are difficult to detect.
It is, therefore, an object of the present invention to provide a new posting method which, in combination with a computer program, avoids the disadvantages of prior art accounting systems.
In particular, an object of the invention is to provide a method of recording financial transactions both in a book of original entry and in the computer in a way that guides the operator to make an obviously correct posting decision without the need of memorizing the debit and credit theory.
Another object of the invention is to improve the detectability and correctability of accounting errors.
A further object of the invention is to substantially expedite the actual entry of accounting data into the computer.